Friday, June 26, 2009

Mike Castle Considering the Cost of Waxman-Markey

"I think that the idea of dealing with some broad environmental questions this way is sensible," Castle said during a Wednesday interview."Having said that, I am concerned about the cost aspect of this -- how that's going to be passed on to consumers and the possibility of businesses in our country making the decision that they don't want to bear that cost and therefore shifting jobs to other parts of the world."

One source of these spurious numbers, the Heritage Foundation, claims that Waxman-Markey would reduce GDP by a total of $7.4tn and destroy 1.9 million jobs by the year 2035. A family's electricity bill would climb 90% and natural gas prices would climb 55%, adding $1,500 to the family budget. An even scarier assertion that the bill would cost families $3,100 was purportedly based on an MIT study – a claim that one of the study's authors, John Reilly, roundly disputed.Opponents reached these conclusions by exaggerating the downside and ignoring the upside altogether. They have overstated the costs of renewable energy, underestimated the future costs of fossil fuels and left out the cost savings of improving energy efficiency. The Heritage Foundation report projects home energy prices will increase three to four times faster than the Congressional Budget Office or Environmental Protection Agency studies, and doesn't include any benefits from improvements in energy efficiency or investing in new industries.The CBO came in with a cost of $175 per household. The EPA projects a lower net cost per household of $80 to $111 per year, and predicts energy savings for US households would lower utility bills by roughly 7% by 2020. Critics often cite the burden on the poor as a reason to not support renewable energy. But the CBO analysis projects a net benefit to the lowest income quintile of $40 per year.

I just spoke with a staffer in Mike Castle’s office, who said the Congressman is waiting to see what happens with amendments on the floor before deciding how he will vote.